Tax Watchdog: Greenburgh offers amnesty amid foreclosures

Sep. 28, 2013

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As the Town of Greenburgh prepares to begin foreclosure proceedings on at least 300 properties on Tuesday, it has launched an amnesty program to waive up to $6 million in interest charges that tax scofflaws have accumulated since 1995.

The amnesty program, which went into effect on Thursday, comes as Greenburgh moves forward on a townwide foreclosure program for the first time in more than 15 years.

The crackdown was announced three weeks after town Supervisor Paul Feiner fought off a challenge from Edgemont attorney Bob Bernstein in a Democratic primary. He faces no opposition in November and looks forward to his 12th term in office in January.

“If we feel guilty about doing it; in our own mind, we’re bending over backwards to businesses or homeowners who could face foreclosure,” he said.

Bernstein questioned Feiner’s timing.

“It’s outrageous that we are learning so soon after the primary that the town, under Feiner’s watch, has allowed 300 properties to be eligible for foreclosure, without taking action over all these years,” he said.

The town, however, had made a decision to allow property owners to slide on their taxes — without the immediate threat of foreclosure, but with interest charges mounting each year.

“The economy has been really bad,” Feiner told Tax Watch. “Eventually these properties would become ours. But it wasn’t the most urgent issue for the past few years. People have had a difficult time paying.”

The amnesty allows property owners with delinquent taxes to pay off their tax bills, without having to pay the interest charges. Those charges get compounded at 12 percent a year, once the town files a tax lien on the property after a year’s delinquency.

That means a delinquent property owner with a $10,000 tax bill would accumulate $1,200 in interest in the first year of delinquency. A year later, that bill would rise to $12,544. By year seven, the scofflaw would owe $22,106.

Feiner said he’s willing to give up the interest in exchange for the cold cash that would come in by the time the amnesty program ends on Dec. 31.

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“It’s more important for us to get as much money in the bank,” he said. “We’ll be better off financially if we are able to collect back taxes.”

New York towns serve an important role in the state’s property-tax system, which includes myriad independent taxing jurisdictions. While schools, Westchester County and its fire districts have the right to raise taxes, they don’t have to worry about collecting the taxes they levy. That’s left to towns like Greenburgh, which collects its own property taxes, as well as the taxes for Westchester County, 10 school districts and three fire districts. The towns not only collect the taxes, they are required to pay, in full, the tax warrants delivered by these taxing districts.

“The town fronts the money,” said Receiver of Taxes Anne Povella. “It hurts.”

Greenburgh in 2013 aims to collect $456 million in property taxes, of which just 12 percent will support the town government.

If a taxpayer is delinquent, other diligent taxpaying property owners pick up the tab for those who skip their tax bill. Interest charges on delinquent taxes are a disincentive to withhold payment. They are also a reward to other taxpayers in town for covering the bill for their delinquent neighbors.

Povella told Tax Watch that more than 400 Greenburgh property owners are delinquent on their taxes. The foreclosure process will begin for those property owners who haven’t paid their property taxes since 2010. Povella estimates that at least 320 property owners will receive foreclosure notices.

“We are hoping that the larger ones will refinance their properties and get current,” she said. “It’s just getting too much for the town to bear.”